RadNet expects to log upward of $18M in revenue from its AI division this year
Industry giant RadNet expects to tally upward of $18 million in revenue from its artificial intelligence division this year, CFO Mark Stolper told investors at the Jefferies Healthcare Conference in New York.
Much of the money will come from the company’s new Enhanced Breast Cancer Diagnostic, or EBCD, offering launched in November. The service charges women a $60 out-of-pocket fee to have AI analyze mammography results.
Stolper said RadNet delivers 1.6 million mammograms annually. Thus far, about 20% of women are opting to use the add-on AI service. RadNet started with an initial pilot program in Delaware last year and, based on early success, they’re now rolling it out to centers on the east coast and eventually the west later this year.
“We’re seeing some real enthusiasm, both from our employee base but also from our patients,” Stolper told conference attendees on June 8. “I think as patients become more aware, more educated and as we get better at communicating the benefits of this, we will see significant growth,” he added later.
RadNet expects the AI group to log between $16 million to $18 million in revenue but still lose money for 2023. However, leaders believe the business line should break even or turn a profit by 2024.
Stolper said RadNet is eyeing additional AI-based add-ons, paid for by customers, in lung and prostate cancer screening. Subsidiary Aidence already scored regulatory approval for its lung cancer solution in Europe, which RadNet said is now being used as part of a national screening program in the U.K.
“As that rolls out, Aidence is going to grow significantly and we’re hoping to take data from that test and bring it to the payers in the United States to create a widespread screening program for high-risk patients here,” Stolper told investors, adding that they expect to earn the U.S. FDA’s approval by the end of the year.
Meanwhile, RadNet providers are already using a prostate AI solution from subsidiary Quantib in the states. Stolper said the company is exploring adding an out-of-pocket AI payment for prostate screening, similar to the breast cancer service.
“We think going to the patients directly is just a stopgap measure until reimbursement comes on board at some point by CMS and the private payers, by which time we hope to share our technology with all of our competitors and the rest of the industry,” he said at the conference. “Our radiologists are extremely enthusiastic about using it and we hope that, when reimbursement comes, we would expect that other radiology groups, imaging centers and hospitals would want to license these solutions because then they can go bill for it,” he added later.
Stolper estimated that about 20 cents of every dollar billed goes to a radiologist for his or her read. RadNet is hoping that, along with bringing in revenue, AI tools can make physicians more productive, lower the cost of doing business, and measurably enhance the company’s margins.
RadNet bills itself as the “leading” operator of freestanding, fixed-site diagnostic imaging services in the U.S. All told, the company has a network of 357 centers in markets including California, Maryland, Delaware, New Jersey, New York, Florida and Arizona.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.